The opinion of the court was delivered by: M. James Lorenz United States District Court Judge
ORDER (1) GRANTING WITH LEAVE TO AMEND DEFENDANT TERRY HILL'S MOTION TO DISMISS; AND (2) GRANTING WITH LEAVE TO AMEND THE REMAINING DEFENDANTS' MOTION TO DISMISS
In this wrongful termination action by a nurse practitioner against California Department of Corrections and Rehabilitation, Division of Correctional Health Care Services ("CDCR") and its various employees and officials, Defendants filed two motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff opposed the motions. For the reasons which follow, the motions are GRANTED WITH LEAVE TO AMEND.
Plaintiff Christine Blantz, a nurse practitioner, entered into a contract with Newport Oncology and Healthcare Medical Corporation, Inc. ("NOAH") to provide medical services as an independent contractor to the CDCR medical facilities. (Compl. Ex. A.) From July 2006 to December 2007, she worked as a nurse practitioner at Calipatria State Prison ("Calipatria"). In November 2007 the CDCR medical auditor conducted an audit and provided a negative assessment of Plaintiff's performance. On December 13, 2007 Plaintiff was terminated without notice or reason for termination. Plaintiff's requests for a written notification of her termination and reasons for termination were unanswered. In February 2008 she applied for work elsewhere within the CDCR and was informed by a third party that she had a poor recommendation from her previous work at CDCR and no longer met their requirements.
Plaintiff filed a complaint in State court alleging intentional interference with contractual relations, intentional interference with prospective economic relations, negligent interference with prospective economic relations, breach of implied employment contract -- wrongful termination, breach of contract, defamation/label, violation of right to privacy -- false light, violation of due process -- California constitution, violation of federal civil rights (due process) -- 42 U.S.C. § 1983, violation of federal civil rights (liberty/injury to reputation) -- 42 U.S.C. § 1983, and breach of mandatory duty -- Cal. Gov. Code §815.6. Defendants removed the action to this court. Terry Hill, M.D. is a member of the Governing Body of the California Department of Corrections and Rehabilitation, Division of Correctional Health Services ("Governing Body"). The Governing Body was established by the receiver appointed by the Hon. Thelton E. Henderson in Plata et al. v. Schwarzenegger et al., United States District Court for the Northern District of California, case no. C01-1391 THE. (Notice of Removal at 2-3.) Dr. Hill removed the action pursuant to 28 U.S.C. Section 1442(a)(1) and (3) as an officer of the United States and, alternatively, pursuant to Section 1441(a) based on federal question jurisdiction, because Plaintiff had alleged two causes of action under federal law.
After removal Defendants filed two motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). A Rule 12(b)(6) motion tests the sufficiency of the complaint. Navarro v., 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted under Rule 12(b)(6) where the complaint lacks a cognizable legal theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984); see Neitzke v. Williams, 490 U.S. 319, 326 (1989) ("Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law"). Alternatively, a complaint may be dismissed where it presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson, 749 F.2d at 534. "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks, brackets and citations omitted).
In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe them in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Legal conclusions, however, need not be taken as true merely because they are cast in the form of factual allegations. Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987); W. Mining Council v., 643 F.2d 618, 624 (9th Cir. 1981). Similarly, "conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss." Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th Cir. 1998).
Defendants maintain that Plaintiff cannot state a claim under 42 U.S.C. Section 1983 for a constitutional violation. In her ninth cause of action, Plaintiff claims that her procedural due process rights under the Fourteenth Amendment were violated because she was terminated without notice or an opportunity to be heard, and has never been provided with a reason for her termination. (Compl. at 15.) She seeks reinstatement. (Id.)
"To establish a § 1983 claim, a plaintiff must show that an individual acting under the color of state law deprived him of a right, privilege, or immunity protected by the United States Constitution or federal law." Levine v. City of Alameda, 525 F.3d 903, 905 (9th Cir. 2008). Plaintiff claims that her federal constitutional rights were violated by CDCR and its officials. Plaintiff must further allege that her termination violated the due process clause of the Fourteenth Amendment.
The requirements of procedural due process apply only to the deprivation of interests encompassed by the Fourteenth Amendment's protection of liberty and property. When protected interests are implicated, the right to some kind of prior hearing is paramount. But the range of interests protected by procedural due process is not infinite.
Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 569-70 (1972) (footnote omitted). In the ninth cause of action, Plaintiff contends she had a property interest in her continued employment and was therefore entitled to due process before termination.
To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.... [¶] Property interests, of course, are not created by the Constitution. Rather they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.
Bd. of Regents, 408 U.S. at 577. Accordingly, "a mere expectation that employment will continue does not create a property interest. If under state law, employment is at-will, then the claimant has no property interest in the job." Portman v. County of Santa Clara, 995 F.2d 898, 904 (9th Cir. 1993) (internal citations omitted); see also Bishop v. Wood, 426 U.S. 341, 345 n.8 (1976). "There is no right [solely] under the substantive due process clause to be terminable only for cause." Id. at 902 n.1. However, where the employee has a legitimate claim of entitlement to termination only for cause, he or she has "a property interest which [is] entitled to constitutional protection." Bishop, 426 U.S. at 345 n.8.
Defendants argue that Plaintiff did not have a property interest in her job because she was not a public employee at all, but worked for NOAH, a private sector government contractor. This argument is supported by the terms Plaintiff's contract with NOAH. (See Compl. Ex. A at 1 & ¶¶ 3.2, 3.2.4.) Plaintiff agreed to "provide medical services as an independent contractor on a locum tenens basis [*fn1 ] to [CDCR] medical facilities served by [NOAH]." (Id. at 1.) Under the contract, NOAH, not CDCR, paid Plaintiff for her work at CDCR's facilities, and Plaintiff was required to report her work hours to NOAH. (Id. ¶1.1.) Among other things, the contract provides for procedures when the client, i.e., CDCR, has complaints about Plaintiff's work, grievance procedures, and termination procedures. (Id. ¶ 1.3, 2.7 & 4.) Specifically, the contract allows NOAH, upon CDCR's request, to immediately remove Plaintiff from her placement with CDCR and terminate the contract. (Id. ¶ 4.2.7.)
Plaintiff apparently relies on Paragraph 2.3 of the contract to argue that she had a property interest in her job based on the policies and procedures applicable to CDCR's employees. Paragraph 2.3 provides in its entirety: "NURSE shall follow the policies, procedures, rules, regulations and medical staff bylaws of ...